Forget the "Buffett rule." It's not enough. What's more, "letting the Bush tax cuts expire for the rich" isn't enough either -- although it might get us halfway there.
As for that "Simpson Bowles" so-called "deficit reduction" plan: It's a hoax, another ploy to give the ultra-rich yet another huge tax cut -- unless you believe that the lobbying fairy will magically grant a wish that's never been granted before: an end to billionaires' loopholes.
If you buy that -- which I don't -- then the plan's just grossly unfair.
The real moment of truth Washington won't face is this one: It's time to admit that we can't rebuild our economy -- or balance the Federal budget -- without raising taxes on the very wealthy. That's what Simpson, Bowles, and all their highly-funded friends won't tell you: We need to raise their taxes a lot.
And by "a lot," I mean doubling them.
Left Is Right
Let's be clear: I'm not talking about imposing sharp increases on incomes over $250,000 or even $500,000, at least not until the economy's healthier. At those levels an expiration of the Bush tax cuts would probably be enough. But once you hit income of a million dollars a year and over, we should go back to the higher tax rates that were in place for millionaires during the Nixon years.
That's right: When it comes to taxes, Nixon's the One. And Eisenhower was much stronger on these issues than Nixon.
The public's being bludgeoned by deficit reduction rhetoric from people who clearly couldn't care less about deficits. They certainly don't intend to do anything about them. Ike and Nixon would throw them out of the cabinet room if they walked in with proposals like these.
Once we get back to their brand of Republicanism, we can revitalize the genuine left and start having a real economic debate in this country.
Get Back to Us When You're Serious
Don't let yourself be intimidated or bullied by the billionaires' pre-paid advocates, who travel in a pack as DC's self-described "centrists." Sunlight -- the economic kind -- will cause the minions of the radical Right to melt back into the darkness.
So don't let them scare you. The solutions to our economic fiscal concerns are obvious, and tax hikes for the wealthy are high on the list. The only question is, Do we have the political will to do carry them out?
Of course, we won't solve all our problems just by raising taxes on billionaires. But we can't solve those problems unless we do.
Here's what we should be saying to our lawmakers -- and to the billionaires who finance them -- next time they want to cut vital programs in the name of "deficit reduction": Show us you're serious, by giving us a serious set of tax rates.And by "serious," we mean Dwight D. Eisenhower "serious." Then you can talk to us about "shared sacrifice."
But not until then.
Floor Plan
We've reached such a low point in our political process that Warren Buffett represents the left flank of acceptable discourse.
The "Buffett rule" says that billionaires shouldn't pay a lower tax rate than his secretary. Thanks for that, Mr. Buffett, since it more than many of your peers have been willing to concede. But you shouldn't pay the same rate than your secretary? You should pay a much higher rate.
Where wealthy interests are concerned, "floors" like the Buffett rule quickly become ceilings.
All Take and No Give
Only one household in 364 collected more than one million dollars per year, according to the most reliable study, and yet those households collected more than a third (36.1 percent) of the total national income. Just 25 hedge fund managers earned a total of $22 billion dollars in 2010.
Over the next ten years we could add to much-needed government spending -- or cut the deficit -- by $110 billion to $150 billion. How? By returning to Eisenhower-era tax rates for these 25 people alone. That's how skewed our national debate has become.
In the 25 year period leading up to the banker-caused crisis of 2008, the percentage of national income going to the top 1 percent soared to levels not seen since the runup to the Great Depression. And in the first year of recovery from that crisis, most of the nation's economic gains went to the top 1 percent, while 90 percent of the population saw their more modest 25-year gains wiped out altogether.
Let's put that another way: Over 25 years, the wealthiest among us jury-rigged the system to take more of our income. The 99 percent bailed them out -- and then the wealthiest among us took all the gains while ninety percent of us lost what little progress we'd made.
Free Ride
And yet millionaire households, as members of the top 1 percent, pay less as a percentage of their income than than those in the 90-99 percent bracket, and not much more than middle-class families do.
What's more, the highest earners among the 1 percent -- the richest of the rich -- are often those who pay the least. Hedge fund operators' management fees are taxed as capital gains, for example -- for money they're earning, not investing -- which allows them to pay just 15 percent on their income.
Million-dollar households make 42 percent of their income, on average, from capital gains at these ultra-low rates today. The portion of their' ncome that isn't being taxed at the 15 percent rate is subject to the official top marginal tax rate of 35 percent under the Bush tax cuts -- and that's before the loopholes kick in.
And man, do they kick in. Even the figures quoted above should be taken with a grain of salt, given high-earning households' ability to lower their "taxable income." That makes even these generous percentages appear higher than they actually are.
So That's Why They Color Republican States "Red"
The President's proposal to let those cuts expire is a good start. High-earning households would see their capital gains rate rise to 23.8 percent and their top marginal tax rate to 39.5 percent. That's a start -- but only a start.
If lawmakers double those rates for millionaires, we'll be able to take their deficit rhetoric seriously.
Does that sound radical? It wasn't too radical for Dick Nixon. During Nixon's Presidency the capital gains tax increased every year, rising from 27.5 percent to 36.5 percent. The highest tax rate for other forms of "unearned income" under Nixon was 70 percent, while the top marginal tax wage was 50 percent.
And We Like Ike: The top tax rate for everything but capital gains was 91 percent under Dwight D. Eisenhower. (The capital gains tax was a relatively modest 25 percent.)
Magical Thinking
Tax-cut advocates say we can't raise taxes on billionaires because they'll stop investing or hiring. Wait, let me get this straight: If an investor writes a check today and makes a billion dollars, he or she keepa 850 million dollars after taxes.
But by this wacky Randian logic, that investor won't think it's worth it to write the same check next year. They'll be too demoralized and discouraged. Only $700 million in return for my signature? Ohh, no. I've lost my motivation. I'm collapsing into a black hole of despair and ennui. I surrender! I refuse!
I don't think so.
The extremist of the right and the angry billionaires tell us that they'll emulate an Ayn Rand fictional character by "going Galt," refusing to make money the way they increasingly do -- by not working for it. (Will rich kids refuse to collect their inheritances, too?)
Nobody "went Galt" in Ike's day. Maybe we just had a better breed of millionaire back then: Tougher. More patriotic. Made of sterner stuff.
Colonel Tom Parker, Elvis Presley's manager, said he considered it "his patriotic duty to get Elvis up into the 90 percent tax bracket." Now that's the kind of fiscal patriotism I believe. In fact, I'd give it a score of 91 on the "American Tax Bandstand": It's good for the economy, and it's got a beat you can dance to.
Higher billionaire tax rates built America. They worked for FDR. They worked for Truman. They worked for Eisenhower. They worked for Nixon. But somehow they're not going to work now, because billionaire investors won't "work" at watching their money grow?
I don't think so.
They Don't Make Republicans Like They Used To
Romney would cut the millionaires' and billionaires' historically low tax rates even more, from 35 percent to 28 percent, would eliminate estate taxes (because nothing says 'fairness' and 'opportunity' like billionaire kids who don't pay taxes) and keep the capital gains rate at its current low rate.
Romney's tax plans aren't just fun and games, though: He'll really bring the hammer down on charities. While certain forms of charitable deduction need reforming, Romney's approach is a strange way to go at it -- unless you think our economic problems were caused by food banks, not Wall Street banks.
Romney's proposals would slash revenue overall, but he says he'll make up the difference by closing loopholes. That's not a gag line; it's his stated policy. No wonder Bill Clinton made so much fun of it in his speech at the Democratic Convention. He got big laughs, too.
Good one, Bill! Who in their right mind believes that you can give away more billions in breaks to billionaires, and that lawmakers will more than make up the difference by suddently getting tough on loopholes -- the ones they created themselves?
Bargain Basement Deal
A lot of Democrats and so-called 'centrists,' that's who, and thir most prominent spokesman is one Bill Clinton. Clinton's been talking up the "Simpson Bowles" proposal that would do exactly that: cut the top tax rates for millionaires, billionaires, hedge funds, and corporations -- then, supposedly, overcome the shortfall (and more!) by closing those same loopholes.
But seriously, folks ...
Actually it is serious. The President is praising the fallacious Simpson Bowles deal. Senators in both parties are meeting to craft a bill along its lines.
Suddenly Chuck Schumer, the Wall Street-friendly New York Democrat, is now thought by some to represent the left flank of the tax argument. Schumer, who's presumably manning the barricades with his fellow radical Warren Buffett, would use any additional revenue to cut deficits and not to provide needed services.
What makes them think of Sen. Schumer as an obstructionist lefty? He wants to keep millionaire and billionaire tax rates at their pre-Bush-tax-cut, already insufficient level. Schumer's proposal, like Buffett's, is a cool solution to a hot problem. But at least neither one of them has drunk the Kool-Aid.
Many of his Senate colleagues, on the other hand, have gotten intoxicated on the stuff. They want to cut billionaires' taxes even more. And they claim they're acting in the name of deficit reduction!
That's how surrealistic this debate has become.
Sanity Check
What can rational people do in the face of this collective billionaire and corporation-sponsored madness? Remain calm. Don't become infected with the mass hallucinations surrounding you.(We've seen that movie already.) And stay grounded in reality.
We can do this. We've built a thriving, growing economy before and we can do it again. All it takes is hard work, old-fashioned American optimism -- and a fair tax code.
These tax rates helped make America great. The America that Rick Perry and other conservatives wax nostalgic about was built by rich people paying their fair share. The money was used to build our schools, bridges, and highways, to educate our young people, to make us the world's leader in the sciences, and to reach the moon.
Fair taxation works. It worked in the 1930s, 1940s, 1950s, 1960s, 1970s, and for most of the 1980s. It will work again, and we should demand no less from our leaders.
I love our "patriotic billionaires," and look forward to hearing them demonstrate that patriotism every time they repeat these words: Double my taxes now!
Follow Richard (RJ) Eskow on Twitter: www.twitter.com/rjeskow
 |
 |
|
| Obama | Romney | |
|---|---|---|
| Electoral Votes (270 to win) |
332 | 206 |
| Obama | Romney | |
|---|---|---|
| Total | 65,899,660 | 60,932,152 |
| Percent | 51.1% | 47.2% |
| Democrats* | Republicans | |
|---|---|---|
| Current Senate | 53 | 47 |
| Seats gained or lost | +2 | -2 |
| New Total | 55 | 45 |
| Democrats | Republicans | |
|---|---|---|
| Seats won | 201 | 234 |
This is why my primary criticism of President Obama is that he caved on the GOP demands to extend the Bush tax cuts for the rich until the end of this yr.
That's nothing more than a license to steal for the 1% with their No Wall St. Reform watchdogs, corrupt elected lapdogs & Ownership Society financier running dogs. They could not have gotten away with the scam they perpetrated in the 2008 bailout as cited by the author:
"And in the first year of recovery from that crisis, most of the nation's economic gains went to the top 1 percent, while 90 percent of the population saw their more modest 25-year gains wiped out altogether."
They could not have gotten away with their scam to scarf up most of the GDP without collusion of bought & paid for by the billionaires elected officials. The root of the problem that you call call what you will, lobbyists as puppeteers running Congress, class warfare, income gap, 1% vs. the rest of us, is corruption of govt. by big $.
This is the basic difference between people like you and people like me. You want to figure out how to bring more money into the government. You want the government to be bigger, and you want it to control more of our lives. You think the government is the source, not the sink. People like me want the government to get out of the way. People like me think that the government should be cut back and starved.
http://www.huffingtonpost.com/social/pshakkottai/romney-tax-plan-website-dems-punk-gop_n_1971053_197249791.html
1) No deductions for anybody nor for anything - maybe keep the exclusion for sale of primary residences.
2) All sources of income, including capital gains and dividends, taxed the same as ordinary income
No tax - 0 to $50,000
20% - $50,000 to $500,000
40% - $500,000 to $1 million
50% - $1 million to $5 million
70% - $5 million and above
http://taxfoundation.org/article/summary-latest-federal-individual-income-tax-data-0#table1
p.s I think 50% from $1 million to $5 million and 70% above $5 million would be better.
That is obscene.
This about this. The right wing argument for this sort of activity (financial trading) is that it makes it easier to get credit to grow the economy. OK. That may be. That may even be a valuable thing to do.
But...
Regardless how good or bad trading is for the economy, this activity amounts to a 'cost of doing business,', that is, it is a 'cost center.' As an economic 'cost,' to the 'business' of the economy. it behooves us to try to MINIMIZE that cost, not glorify how much the Accounting Department can rip off the company, so to speak... How long do you think a Board of Directors would allow a company's Accounting Department to pay its directors several BILLION dollars, just for being so sharp? As a society, we are paying waaaaaaaaaay to much for this work.
Let's try paying a LIVING WAGE to minimum wage workers, first. THEN we can discuss whether Mr. Hedge Fund manager is 'worth' a billion dollars or two...They are NOT worth that cost.
And arguing that the 'free market' works to set their outrageous compensation only illustrates how badly the system is broken.
You think that because a CEO negotiates a great income, then some burger flipper didn't get a raise? The CEO's relative talents didn't make the burger kid any better or worse at his job.
What is a "living wage?" What should a semi-literate burger flipper get paid? $10/hr? $25? $250?
Do you think that there should be a government bureau to examine each job and decide how much is too much and how much is not enough? Should everyone get the same wage regardless of what they do or how well they can do it?
Oh, yes, we know that police, teachers and firemen are generally government workers -- please. But 16T in debt? With families each owing 200K+? Our tax infrastructure alone would occupy every brick, stone, rail, 2x4, road, person, dollar, acre in the Dallas-Fort Worth area. Don't you think simplification could help?
It's gotten a little crazy to see all this flailing about for billionaire money when each of you could be learning to innovate and contributing to the opportunities in front of us,
If you seized all of the money of billionaires, you'd pay the debt we are accumulating for a couple of weeks. It's clear to many of us that the tax infrastructure itself is literally killing or ruining good peoples' lives. That's what a good person would focus on, not who pays what.
Consequently, to the average American, you seem to be wasting your time.
A JFYI... it's your life.
Can't you read? Are you that dense???? Just GO LOOK!
The big three are: Social Security, Medicare, and Defense. The first two are not part of the annual budget.
Those three DWARF everything else. The first two are obligations made by Congress that most people think are worthwhile. There is no plausible way to cut Social Security without millions who depend on it from suffering. People you know.
Medicare COULD be a lot cheaper, if we would simply adopt, outright, ANY of the healthcare/insurance systems in use in the EU. Any of them. Pick one.
Defense? Well, I agree, there's LOT of waste there. Not to mention a useless war killing our youth for no good purpose, other than to save national face.
Interest on the debt. That's another big one. Have to pay it. Would you like to default?
Now, look at ALL the rest. Zero it out, if you like. It still won't fix the problem.
If you want to see the real causes of the debt explosion google "CBO debt chart" and study it.
http://www.huffingtonpost.com/social/pshakkottai/david-stockman-mitt-romney_n_1968106_196794793.html
Thanks for the shout out to Elvis et al! Years ago I read a biography of Elvis that recounted Elvis' daddy admonishing him to have his accountant find more loopholes to bring down his tax contribution.
"No, Daddy," replied Elvis. "It's my patriotic duty and honor to pay this level of taxes on the bounty I have received." (Of whom much is given, much is required -- Bible).
Elvis. Still The King!
I sincerely think that wealth creation and becoming rich is a powerful force in our world, fostering innovation and society-benefiting behaviour (in a regulated environment) but this should be true for each generation.
According to me, taxes today are at a reasonable levels (and we can discuss a few points increase) but inheritance taxes, according to me, should be put at something like, for example, 90% for everything above $5m (example)... that would allow rich people to let a lot of money to their offsprings and would readjust chances of each generation while generating ressources for the country. And of course this needs to be coupled with the same exit tax for those who want to leave the country/citizenship.
Those rich kids didn't earn ANY of that money. They don't deserve it, now, do they? It will RUIN THEIR WILL TO WORK (at least to the same extent that an unemployment check will ruin a worker's will to work).
As for exit tax; that's pretty easy to avoid. Liquidate and move it before you expatriate.
And what is interesting is that if something is not done to fix our economic system to make it reasonably fair (where a worker paid minimum wage makes a LIVING WAGE), then something along those lines just might happen. After all, it DID happen in 1789 France, and for the same reason.
The Republicans back then believed in the value of the American workforce. Today they believe in the value of American millionaires and billionaires. The less the workforce makes the more bucks available for the Uber Rich.
The rise in wealth disparity proves this. The wealthys wealth is not being invested in the workforce. It is being removed from the workforce, and being removed from America.
They give lip service to patriotism, while worshiping in the church of Greed.
Greed has no patriots...Nor borders.
It's time they started giving back, instead of just taking.
It is the majority employee class that is also the majority of the consumer class in our society's economy -- an economy that has been a consumer driven society since manufacturing began moving overseas after the post WWII boom. Without money to be the consumer class, the employee class cannot drive this economy and it will eventually collapse.
Allowed to evolve unchecked, one can envision an American economy that looks just like those inner-ring suburbs across the country that have pretty much been abandoned and lie crumbling, because no one will invest there, so no one can make a living there. Pretty, huh?
As a result, I expect to see a slow, but growing resurgence of angry citizens pushing back toward the other extreme. You are seeing the front end of this phenomenon in these comments. The fact of the matter is that the greedy got too greedy, and now people are starting to complain.